China has confirmed its commitment to stimulating economic growth following a top-level economic planning meeting that concluded on Thursday. The meeting, which was reported by state-run CCTV after the mainland China market had closed, emphasized the government’s intention to adopt a proactive fiscal policy. This includes plans to increase the deficit and issue more ultra-long bonds in the coming year.
The iShares China (TSX:XCH) Large-Cap ETF (NYSEARCA:FXI) experienced a 0.8% rise in premarket trading, although it later reduced those gains. The annual economic conference, presided over by President Xi Jinping, also indicated a willingness to moderately ease monetary policy by lowering interest rates.
This approach mirrors the stance taken during a Politburo meeting held on Monday, which marked the first time since the global financial crisis in 2008 that the term “moderately loose” monetary policy was used. This language suggests a significant focus on bolstering China’s economy and bracing for a possible trade conflict with the United States, in light of Donald Trump’s return to the presidency.
The specific targets for annual growth and fiscal deficit are traditionally announced during China’s parliamentary meeting in March. The recent meetings underscore China’s proactive steps to navigate economic challenges and signal potential policy directions for the upcoming year.
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